Subject: Warning - Wade Cook

Last-Revised: 23 Feb 1998
Contributed-By:
G. S. Reedy

Wade Cook runs seminars, priced around $3,500, that explain his
strategies for investing, with emphasis on writing covered calls.
Much of the same information is available in his book, The Wall
Street Money Machine.

Don't be fooled by Wade Cook's book. I read it, did some studies of
covered calls. Most cheap covered calls are written on stocks that
are in the process of declining in price. According to postings in
Dejanews, some people admit to having lost a bundle following Wade
Cook's trading programs. When I read his book, some of it seemed too
good to be true. And, as the old axiom says, "If it seems too good to
be true, it probably is."

I had a conversation with a commodity trader several years ago. He
told me that he was continually amazed at people who had demonstrated
expertise in their respective fields, and were somewhat successful at
their work. Then, they would read a book about commodity trading and
think that they could start making a living at it. Basically, the
same principle applies to trading stock options. Go slow, crawl
before you walk, walk before you run. To use a baseball analogy, go
for base hits first. The triples and home runs will come with
practice.